Publications

Mezz Lenders and Intercreditor Agreements

July 2010
Distressed Assets Investor

During the past decade, borrowers accessed subordinate debt by obtaining mezzanine loans—financing secured by pledges of the ownership interests in an entity that owned real property, rather than by the real property itself. The relationship of the mezzanine lender to the mortgage provider, and the mezz lender’s rights in that relationship, are governed by an interceditor agreement. This is often a major factor in the potential success or failure of the loan.